SUPREME COURT CONFIRMED WHICH TYPE OF SALE TRANSACTION THROUGH GENERAL POWER OF ATTORNEY IS VALID?

The Hon’ble Supreme Court made it clear that in M/s. Suraj Lamp Industries Pvt. Ltd Vs State of Haryana & others vide Special Leave Petition No.13917 OF 2009, Court observations are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance. A person may enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney empowering the developer to execute agreements of sale or conveyances in regard to individual plots of land or undivided shares in the land relating to apartments in favour of prospective purchasers. In several States, the execution of such development agreements and powers of attorney are already regulated by law and subjected to specific stamp duty. Our observations regarding ‘SA/GPA/WILL transactions’ are not intended to apply to such bonafide/genuine transactions.